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Nigeria’s interbank lending rates held steady at 8.25 percent on average this week on ample naira liquidity after the central bank declined to borrow funds at higher yields through its open market operations (OMO) bills from commercial lenders.
“The market has been very liquid this week because the central bank refused to sell OMO bills,” a dealer said.
The lenders’ balance with the central bank stood at 261 billion naira in credit on Friday, boosted by about 114 billion in matured treasury bills repaid on Thursday.
Nigeria’s central bank usually sells treasury bills in the secondary market to mop up perceived excess liquidity from the banking system.
The secured Open Buy Back (OBB) remained unchanged at 8 percent, while overnight placement was also stable at the same level as last week, 8.5 percent.
“We see rates inching up gradually by next week as the central bank moves to tighten liquidity,” another dealer said.
Dealers said the central bank may resort to debiting banks for cash reserve requirements (CRR) to cover for the last four week of arrears in its bid to reduce liquidity.
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